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New Africa about much more than football

June 11, 2010

SOCCER-WORLD/The first World Cup in Africa also highlights a dramatic change driven by forces more powerful than football.

While the competition may help change Africa’s image in the minds of any outsiders still fixated on cliches of bloodshed and famine, those in the know long ago spotted Africa’s emergence from no-go zone to frontier market and are seeing the returns.

If you had put $1,000 in Nigerian or Kenyan stock markets at the start of the year, you would have made a profit of around $150. If you had done the same with the U.S. benchmark S&P 500 index, you would be nursing a loss.

Global fund trackers EPFR reported a 40th consecutive week of inflows to African equity funds this week. India’s Bharti Airtel completed a $9 billion purchase of Zain’s African operations in another vote of confidence in the continent.

“It’s not to denigrate the World Cup for a moment, but it’s not what defines Africa in 2010. What should really be defining Africa is Zain buying Bharti’s assets,” said African affairs commentator Joel Kibazo.

“I think there is still a false image of Africa even in South Africa, never mind the rest of the world, about the rest of the continent. The fact is, it has really been getting ahead and there are more people with money to spend.”

Half of the world’s 10 fastest growing countries will be in Africa in 2011 according to the International Monetary Fund.

Better economic management, increased political stability, debt relief, higher production and prices for export commodities and technology — mobile phones in particular — have all helped improvement.

Africa’s fate these days is also less linked to handouts from former colonial powers, themselves struggling under debt burdens proportionally bigger than Africa’s. It is more closely tied to Asian and other more dynamic economies.

“We need to wipe out that smug Western view of more risk in Africa,” said David Murrin, chief investment officer at UK-based Emergent Asset Management.

“As Western belts tighten and we start to deal with fiscal situations, the political risk differential is closing rapidly.”

Although Africa is seen in a much more positive light than for decades, however, its growth is from a low base and countries face challenges from bogus democracy to shambolic services to ethnic division.

No other African country appears to have the capability to host the World Cup yet and it is hard to forecast when that might be the case.

Infrastructure such as power and roads are dire and Africa needs an estimated $93 billion a year to improve it. South Africa has appalling crime levels, but its police and justice system are efficient compared to those in much of the continent.

Egypt lost out to South Africa for the 2010 contest, but some Egyptians doubted it was really ready for such a challenge.

“I don’t think we had the capabilities,” said student Mohamed Nabil in Cairo. “It’s good for South Africa. They’re way ahead of us. But it’s nice that the World Cup is held in Africa in general. That is progress in itself.

Comments

Dear Matthew,

The Bottom Line is the FIFA World Cup Franchise has never been the preeminent example of Trickledown Economics. The more interesting Point is how South Africa have provided a great service to the Continent by hosting the World Cup which has triggered an upswell in Africa Commentary, most of it rational and logical and hence Positive. The World Cup might prove to be the Tipping Point with regard to Perception of the Continent. For that, I am grateful. The Biggest profits tend to be made when the Perception [previously egregious] starts to converge with the Reality.

Aly-Khan Satchu
http://www.rich.co.ke
Nairobi

Posted by AlyKhanSatchu | Report as abusive
 

this blog is cool.there have been an economic revolution going on in africa,even when the westerner media has been portraying africa in a bad light( which the world cup will have a long way to redress),now world recession has expose the west and upcoming economies like china,brazil,india etc is determining the shift and they are taking led in investment deals in african pumping billion of dollar not in aid.you see new refirneries,railways,schools,hospital etc croping up into what the westerner called bottomless pit.Chinese will go but this infrastructure will stay.

Let me make some thing clear that the era of colonalism is gone and most african countires are independent that is to say no more open slavery and looting of africa resources,no wonder french and america and the so called eropeans rooting to partner in area of needs for africa ie in nigeria french will assist to build a nuclear energy plant,USA is asissting as well,now they are coming out open not to allow chinese enthrone themselve as true friends of africa.Nigeria is even considering yaun because of depreciating state of dollar and euro.

It is time that africa can not be neglected again and even if the so call anti africa movement like a friend of africa said in last olympic in canada i mean Sepp blatter,continue in they quest, Africa will keep looking east and they will still see africa grow to the envy of them.repent now or be doom.thank you.

Posted by ifydechu | Report as abusive
 

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